5 Midcap Stocks To Buy And Hold For The Festive Season

It's been a good year for the markets and the momentum has been led by domestic institutions. Going forward we may see some consolidation ahead. Here are 5 midcap stocks that investors could buy for the festive season as listed by Motilal Oswal.

Tata Power

Motilal Oswal expects Solar EPC to give a leg up in earnings for the next two years. Recent award wins, particularly from NTPC, have seen its EPC order book inflate to Rs 85b, thereby providing strong visibility.

"EBITDA from Solar EPC is expected to post a 30% CAGR over FY21-23. This -coupled with the commissioning of renewable projects and the takeover of Odisha DISCOMs -should lead to a 33% PAT CAGR over FY21-23. Furthermore, the possible benefit from the merger of CGPL with itself provides an upside to profitability," the brokerage has said.

Buy Varun Beverages

According to Motilal Oswal Varun Beverages is expected to deliver strong volume growth across all the three product segments, with an increase in consumption patterns to pre-COVID levels.

"We expect strong demand traction over the next few years due to: a) strong distribution network, b) rising penetration in the newly acquired region (south and west India), c) diversifying product portfolio, and d) growing refrigerator penetration in rural/and semi-rural areas per household and higher power availability hours. We expect a revenue/EBITDA/PAT CAGR of 20%/25%/56% over CY20-23E," the brokerage has said.

APL Apollo

Motilal Oswal also has a buy on the stock of APL Apollo. "We expect strong volume growth and improved profitability on the back of: a) increasing shift towards structural tubes (from RCC structures), b) a pan-India presence, coupled with diverse product offerings, c) behemoth market share, increasing the share of value-added products. Several cost-control measures, kicking-in of operating leverage, and growing share of VAP is expected to lead to improved margin and higher cash generation. We expect a revenue/EBITDA/PAT CAGR of 26%/26%/36% over FY21-24E," the brokerage has said.

Orient Electric

"With demand scaling back gradually and the upcoming festive season ahead, we believe Orient Electric is best placed to capture this trend, with its strong manufacturing and distribution capabilities. We forecast a revenue/EBITDA/adjusted PAT CAGR of 19%/21%/25% over FY21-24E," Motilal Oswal Financial Services has said.

Trident

Trident is witnessing robust demand after the lifting of COVID-related lockdown restrictions. The demand trend in Home Textiles is expected to continue, with freight cost gradually subsiding and pent-up demand in the US and Europe market. The Paper segment is expected to see a sharp recovery with the opening of offices and educational institutes.

Improvement in balance sheet of corporate India

"The country witnessed the third consecutive year of normal monsoon which is also likely to aid rural demand, and with the government balance sheet in good stead, we expect the government to press the fiscal pedal to drive growth over the next 6-12 months. Corporate India too surmounted the challenges posed by Covid with unprecedented cost containment measures with parallel improvement in balance sheet as well as cash-flows," the brokerage has said.

Disclaimer

The above stock is picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.